Dividends

A dividend is when a company gives away a fraction of their earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments, shares of stock or other property.

A dividend rate may be in dollar amount of each share receives (DPS, dividends per share). In addition, a dividend yield can be quoted in terms of a percent of the current market price. Thus, a company’s net profits can be allocated to shareholders via a dividend or kept within the company as retained earnings. Payments of dividends must be approved by the shareholders and can be shown as a one-time special dividend or as an ongoing cash flow to owners as well as the investors.

Dividends will be credited/debited from your account after the market close the night before the ex-div date.

As a single stock dividends example:

A client is long 10 CFD’s of Twitter and a $0.07 dividend has been declared. If a client holds an open position until the ex-div date they will receive the dividend which equates to a credit of $0.70 (10*$0.07=$0.70).

A client is short 10 CFD’s of Twitter and a $0.07 dividend has been declared. If a client holds an open position until the ex-div date, they will pay the dividend which equates to a debit of $0.70 (10*$0.07=$0.70).

As an indices dividends example:

A client is long 5 CFD’s of WS30 and the constituent companies are paying dividends which equate to 3 index points. If a client holds an open position until the ex-div date they will receive the dividend which equates to a credit of $35(5*7=$35).
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A client is short 5 CFD’s of WS30 and the constituent companies are paying dividends which equate to 3 index points. If a client holds an open position until the ex-div date they will pay the dividend which equates to a debit of $35 (5*7=$35).

* For clients with positions in total return indices, dividend values are automatically reflected in the price of the index. E.g. Clients who have positions in CFD DAX30 not be debited/credited as dividends.

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Our products are traded on margin and carry a high degree of risk. Losses can exceed your initial deposit.